Quick ratio: Guide to what is Quick Ratio

Guide to what is Quick Ratio. We explain its formula, vs current ratio along with interpretation, examples, and importance. Learn how to calculate the quick ratio, a measure of liquidity that shows how well a company can pay its short-term debts with cash or quick assets. Download a free Excel template and see the difference between quick ratio and current ratio. The quick ratio, also known as the acid-test ratio, is a crucial financial metric used to evaluate a company's short-term liquidity position. What is Quick Ratio? The quick ratio measures a company’s ability to pay off short term obligations with liquid assets. In other words, the quick ratio is an accounting ratio that measures a company’s liquidity. It is also known as the acid test ratio as it tests the ability of a company to convert its quick assets into instant cash. The ratio measures the rupee amount of liquid assets available against the rupee amount of current liabilities. Liquid assets or quick assets are those ...